We recently got to know Georgia after her HR team introduced her to PinPoint!
Georgia, aged 36, works in UX at a digital design company in Manchester.
Using our simple platform, she told us all about her credit cards, pensions and income and expenditure.
Money wise, she had quite a bit going on. But what she really wanted to do was achieve her main goal…
A trip to Japan in summer 2018!
So what financial stuff did Georgia have going on?
- 2 credit cards with balances of £750 and £2,500 whilst paying interest at 25% and 20% respectively. They cost her £400 a month to maintain.
- A private pension worth £3,000, which she paid £160 a month into.
- No savings, but she had a monthly surplus of around £600 which she really enjoyed… hence the no savings!
What we did to help…
We figured out Georgia had good credit, so there was no reason why she should be paying interest.
We balance transferred the credit cards onto a new deal with no transfer fees or interest for the first 24 months.
Keeping her monthly payments at £200, Georgia now has the same spare cash each month to enjoy, but she’ll now be debt free by June 2018. That's 2 months faster than before we met her!
And even better, she will save £330 of interest too!
Georgia didn't realise that as a higher rate taxpayer, she was entitled to extra pension tax relief; either by topping up her pension or having extra in her monthly salary.
Georgia opted to have this extra £40 a month of relief in her salary for now. This will save her £520 between now and her trip to Japan!
And it gets better…
She can also backdate the amount she's been missing out on. In Georgia’s case, she can go back for 2 years (for some it could be up to 4 years). So she will get a refund of £960 (24 x £40) from HMRC, which we think is pretty handy!
Georgia had also been missing out on employer pension contributions via the workplace pension scheme. She had previously chosen to opt out because she didn’t really understand and she had her own policy.
After explaining the benefits, Georgia agreed it was a no brainer.
We also decided that after her trip to Japan, Georgia would divert her HMRC tax saving into her workplace pension rather than into her bank account. This will make her retirement look a little rosier.
In fact, we calculated that based on her reinvesting her employer's contribution, assuming growth at 5%pa, plus her tax savings, she would have an extra £121,000 in her pension by age 65. Now, that’s a lot of free money!
Whilst Georgia knew she could save a little each month, she felt it was so insignificant compared to the £5,000 she needed, she may as well not bother at all. Instead, she thought she’d just fully max out her credit limits.
After explaining that she actually only needs to save around £260 monthly because of the £1,800 savings we’ve made her, Georgia thought it was much more achievable!
The £260 monthly will go into a regular monthly saver by direct debit just after payday. No effort required! Over the year, it’ll also earn her around £70 of interest towards her trip too. That’ll get her a few extra glasses of Sake whilst she’s away!
But we’ve saved the best till last…
Georgia will come back from Japan debt free - something she never even thought was possible!
Finance might be boring for some, but with £1870 towards your dream holiday, surely it’s worth it?